Asia Pacific Data Centre Investment Landscape

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ASIA PACIFIC DATA CENTRE INVESTMENT LANDSCAPE

Rent Revenue and Cap Rate Estimate By 2030, the top five data centre markets in Asia Pacific— Japan, Chinese mainland, Australia, India, and Malaysia— are projected to collectively contribute approximately 72% of the region’s total annual colocation rent revenue. Japan, supported by both high average rental rates and a robust development pipeline, is expected to lead the region with a 22% share of total rental revenue. Each of these top markets is forecast to generate over US$4 billion in annual revenue from colocation services. Collectively, these markets are projected to contribute approximately US$32 billion in annual colocation rental income by the end of the decade. In terms of asset valuation, the cumulative value of built data centre assets across 14 Asia Pacific markets is expected to reach approximately US$600 billion by 2030 based on current cap rates. In comparison, the U.S. market is anticipated to command a total valuation of nearly US$460 billion. On the investment front, Hong Kong China, Japan, Singapore, South Korea, and Taiwan have current cap rates below 5%. In contrast, emerging markets such as India, Indonesia, the Philippines, and Vietnam exhibit higher cap rates in the range of 7% to 8%, reflecting relatively elevated risk premiums and market immaturity. In addition, the region is witnessing rising demand for AI and machine learning (ML) workload deployments. These workloads have the potential to drive exponential growth in data processing requirements, compelling operators to accelerate the development of high-capacity, advanced facilities across the region to meet this emerging demand.

Annual Rent US$ million

Total Annual Colo Rent in 2030 and Current Prime Cap Rate

Cap Rate

72% Share

28% Share

Annual Colo Rent 2030 APAC $44 BN

12,000

9%

8%

10,000

7%

8,000

6%

5%

6,000

4%

USA $39 BN

4,000

3%

2%

2,000

1%

0

0%

Japan Chinese Mainland

Australia India Malaysia Singapore South Korea

Hong Kong, China

Indonesia New Zealand

Thailand Taiwan, China

Philippines Vietnam

Annual Colo Rent USD million Cap Rate (RHS)

Source: Cushman & Wakefield APAC DCG

The total annual colo rental revenue in Asia Pacific is forecast to surpass the U.S. by 2030

• The current average cap rate in Asia Pacific is estimated at 5.8%. • Beyond the local cost of capital, factors such as tenant profile, lock-in durations on lease contracts, land lease durations, occupancy rates, etc., can directly impact the cap rate estimates.

Notes for graph • The estimates are based on unlevered cost of capital. • For comparison, net property income (NPI) of 70% has been used for all markets. • Colocation rental income is the only source of revenue factored in the assessments. Other charges such as cross connects, internet, one-time set-up fees, add-on services, etc. have been excluded from the analysis.

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